Income Tax Appellate Tribunal Judgment: Vishal Aggarwal vs. Pr.CIT, Noida

Case Number: ITA 803/DEL/2022

Assessment Year: 2012-13

Appellant: Vishal Aggarwal, S/o. Shri Ram Dayal Aggarwal, B-463, Delhi Apartment, Plot No. 15C, Sector-22, Dwarka, Delhi.

Respondent: Pr. Commissioner of Income Tax Office, A-2D, Sector-24, Noida – 201307, Uttar Pradesh.

Summary of the Final Judgment

The appeal revolves around the assessment order issued under section 147/143(3) of the Income Tax Act, 1961, by the Income Tax Officer, Ward 5(2)(5), Gautam Budh Nagar. Vishal Aggarwal filed his return of income, declaring income of Rs. 11,14,480/- for the A.Y. 2012-13, which was subsequently reopened under notice u/s 147 r.w.s. 148 dated 25.03.2019.

In response, the assessee filed a return on 09.09.2019. Post inquiries, the Assessing Officer accepted the income. However, the Pr.CIT deemed the Assessment order to be erroneous, primarily on two grounds relating to the cost of acquisition of property and verification of the source of a loan repayment. Despite the appellant’s detailed responses and document submissions, the Pr.CIT directed a re-computation of short-term capital gains, prompting the appeal to the Tribunal.

During the hearings, the appellant contested the Pr.CIT’s viewpoint, highlighting that all transactions and payments were made through banking channels and were adequately supported by documents including agreements, bank statements, and a certificate from the builder certifying no dues from Mrs. Sangita Gupta, the intermediary from whom the property was purchased.

The Tribunal, after examining the facts and legal provisions, found that the amount paid to Mrs. Sangita Gupta formed part of the cost of acquisition of the asset. The sale deed value was not solely indicative of the cost of acquisition for the purpose of Section 48 of the IT Act. It was held that the Assessing Officer had conducted sufficient inquiry and was justified in considering the agreement to sell between Mrs. Sangita Gupta and the assessee for determining the cost of acquisition.

The appeal was thus allowed, favoring the appellant, Vishal Aggarwal, and the order passed by the Pr.CIT under section 263 was set aside.

Conclusion

This judgment underscores the importance of comprehensive documentation and due diligence in property transactions and their recognition for tax purposes. It also serves as a precedent for similar cases where the cost of acquisition and subsequent capital gains computation may be in dispute.

Date of Pronouncement: 20th March 2023

Members: Sh. N.K.Billaiya, Accountant Member, and Sh. Anubhav Sharma, Judicial Member.

Final Judgment on the Appeal of Vishal Aggarwal vs. Pr.CIT, Noida for A.Y. 2012-13